Evosimab obtained two major positive clinical results, maintaining the company's “buy” rating. Recently, the company continuously disclosed phase III clinical results of two PD-1/VEGFR double anti-evosimab, defeating pabolizumab head-to-head in NSCLC patients with PD-L1 TPS ≥ 1% (the world's first PD-1 antibody to win head-to-head with a phase III clinical single drug), and obtained significant benefits of PFS vs 7.1 in patients with EGFR-TKI-resistant NSCLC. Evosimab was approved for marketing in China on May 24, and we expect peak domestic sales of 7.1 billion yuan. We expect the company's revenue in 2024/2025/2026 to be 25.72/42.20/6.293 billion yuan, and net profit to mother will be (3.60) /3.77/1,030 billion yuan, corresponding to EPS (0.42) /0.43/1.19 yuan. Using the DCF method, we gave the company a target market value of $48.7 billion (based on 9.3% WACC and a sustainable growth rate of 3.0%), corresponding to a target price of HK$60.54, maintaining a “buy” rating.
HarmonI-2: surpassing pabolizumab, evosimab is amazing. The positive results of ivorimab defeating the current “king” of lung cancer immunotherapy “pabolizumab” head-to-head in the mid-term analysis of the HarmonI-2 study confirmed its clinical value: 1) The success of the KEYNOTE-042 study was mainly driven by patients with TPS ≥ 50%, while evosimab showed significant PFS benefits in the TPS 1 to 49% of people; 3) In the KEYNOTE-042 study, PFS in the test group and control group The curves intersect, showing insufficient benefits in the early stages of treatment, and directly caused PFS of patients with TPS ≥ 1% to be not significant (HR = 1.07). The PFS advantage of evosimab shows the early benefits it brings to patients. Furthermore, as an upgraded version of PD-1/PD-L1 monoclonal antibody, we are optimistic about the future opportunity of using evosimab in combination with ADC to further expand indications.
Harmoni-A: Milestone progress, commercialization begins
In the field of EGFR-TKI-resistant NSCLC, where immunotherapy has been repeatedly frustrated, the positive results of evosimab through the Harmoni-A study showed significant clinical significance: 1) PFS was significantly superior to the control group (7.1 vs 4.8 months, HR = 0.46); when data maturity reached 52%, the OS of the trial group showed a benefit trend (17.1 vs 14.5 months, HR = 0.80), which is superior to previous IO protocols; 2) 86.3% of patients have previously received three generations of EGFR- TKI treatment is in line with clinical practice; 3) It is safe and controllable, or results in strong patient adherence. This indication was approved for marketing in China in May '24, and is expected to quickly occupy the blue ocean market. Overseas studies on the same indication are expected to complete patient enrollment in 2H24.
The company continues to transform into a major pharmaceutical company, and subsequent catalytic acceleration
The clinical success of evosimab and approval combined with the rapid release of cardonilizumab in 22/23 are expected to accelerate the company's continued evolution into large pharmaceutical companies capable of self-hematopoiesis, and a series of 2H24 catalysts are expected to become a new driving force for this transformation, including: 1) inucimab and iroximab are expected to be approved within the year; 2) Gumocimab is expected to be submitted for NDA; 3) It is expected that patients will complete multiple phase III clinical trials.
Risk warning: Clinical trial progress and uncertainty; risk of product commercialization; risk of failure in overseas clinical trials.